Asset Allocation Accounts for Less Than 50 Percent of the Variance

question 16

True/False

Asset allocation accounts for less than 50 percent of the variance in quarterly returns for a typical pension fund.

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Definitions:

Semiannually

A term indicating that an event or action occurs twice a year.

Capital Gain

The profit earned from the sale of an asset when its selling price exceeds its purchase price.

High-duration

Describes bonds or other fixed-income securities that have high sensitivity to changes in interest rates, usually because they have a long time until maturity.

Low-duration

Refers to investments that have a short time until maturity, typically associated with lower interest rate risk.